Can an EPA Help a Country with a Decreasing Population?

Kenji Kondoh^a*
aChukyo University, Japan

Abstract

To help a developed country with a decreasing population such as Japan, we analyzed the effectiveness of various economic policies for securing a sufficient amount of qualified labor by introducing foreign unskilled workers and training them in terms of skill. We found that under certain conditions, the government must announce only the required period of skill training, while the total number of skilled trainees must be considered to be endogenously given. Then, policies that would bring about change in the required period, encourage capital inflow or raise the penalty charge for illegal immigration may become effective.

JEL Classifications: F22, J61

Keywords: skilled trainee, international migration, illegal foreign workers, aging society, Economic Partnership Agreement

Environmental Uncertainty, Comprehensive Performance Measurement Systems,
Performance-Based Compensation, and Organizational Performance

Axel K-D. Schulz^a*, Anne Wu^b and Chee W. Chow^c
aMonash University
^bNational Chengchi University
^cSan Diego State University

Abstract
This study explores firms’ use of comprehensive performance measures and performance-based compensation in response to the increasingly uncertain competitive environment. Data from a sample of 84 Taiwanese high-tech manufacturing firms revealed an increased use of such systems among firms facing higher perceived environmental uncertainty. We also found performance-based pay to fully mediate the relationship between comprehensive performance measures and employee effort. Finally, employee effort is significantly and positively associated with organizational performance and fully explains the effect of performance-based compensation in increasing organizational performance.

JEL classifications: M40, M52

Keywords: Comprehensive performance measurement, performance-based compensation, employee effort, organizational performance, environmental uncertainty

Value Relevance of Profit Available for Dividend

Shin’ya Okuda^a*, Manabu Sakaue^b, and Atsushi Shiiba^c
aOsaka Gakuin University, Japan
^bHosei University, Japan
^cOsaka University, Japan

Abstract
According to some research, the profit available for dividend is undervalued. This paper examines the determinants of undervaluation based on the tax and agency hypotheses. First, the influence of taxation on dividend income on the valuation of companies in Japan is examined. However, evidence supporting the tax hypothesis cannot be provided. Next, this paper examines the agency hypothesis, employing the ratio dividend divided by the profit available for dividend as the proxy variable of agency cost. The result is consistent with the hypothesis: the profit available for dividend in a company with insufficient dividend payout is undervalued.

JEL classifications: G15, M41

Keywords: value relevance, profit available for dividend, taxation on dividend income, agency problem

The Effects of Strategic Subsidies under FTA with ROO

Kazuhiro Takauchi^a*
aKobe University

Abstract
This paper presents a model of a free trade area (FTA) with rules of origin (ROO) under an oligopolistic final goods market. Following the existing literature, we also consider ROO to serve as a protectionist device and mainly focus on the interaction between ROO and the subsidy policy. A paradoxical result is considered: if the government of the final goods exporter within the FTA is the first mover, it chooses export tax. Furthermore, we show that the profit of a firm located in the FTA increases due to a reduction in the external tariff.

JEL classifications: F12, F13, F15

Keywords: rules of origin, free trade area, export subsidy, export tax, oligopoly

Anatomy of the Post Global-Quota Trade Disputes
on China’s Textile Exports

Jai-Young Choi^a*
aLamar University, USA

Abstract
This paper explores the trade disputes about China’s textile exports that escalated after the expiration of the global quotas on January 1, 2005 and settled down after months of intensive negotiations. Particular attention is paid to China’s export taxes which were revoked following the U.S. and E.U. decision to impose import quotas. Noting that the real issue was bigger than just textiles since the backbone of the disputes was the mounting trade deficits and flight of jobs from the U.S. and E.U., the paper studies the debates from a range of perspectives and concludes that the optimal solution is free trade.

JEL classifications: F13, F31, F33

Keywords: export taxes, import quota, pegged exchange rate system, dead weight loss, game theory